No one enjoys making an estate plan but doing so is necessary in order to make sure your wishes are carried out regarding your own care and what happens to your assets after your death. Creating a comprehensive estate plan is also a help to your loved ones, who will not have to wonder about what your wishes would have been with an unfiled will. You should review your estate plan regularly and update it as needed when tax laws, your family dynamics, or your assets change. Whether you are creating or reviewing your estate plan, you should keep the points below in mind.
Minor Children
If you have children who are younger than 18, you need to appoint a guardian for them in case anything happens to them. The simplest way to do this is with a will. Minors also cannot inherit property, so you should consider whether you need to set up a trust or some other mechanism to hold assets for them until they are adults.
Filial Responsibility Laws
In filial responsibility states, adult children could be held responsible for financial supporting their parents. This usually includes medical bills and long-term care, particularly if the parents have little money. This could affect either your finances in regards to your own parents or the finances of your adult children regarding your care. Be sure to find out whether these laws are in place in the state where you live and what steps you may need to take to protect yourself or your adult children.
Family Dynamics
There are many different ways in which you will need to consider family dynamics as you learn about what you need to know about estate planning and eventually prepare your own. The points that follow are just a few examples. First, are you in a blended family, with children from previous relationships? If so, you may want to look into a trust or other vehicles that can ensure that both your current spouse and children from a previous relationship inherit some of your assets. You also need to consider family dynamics around people you are appointing as executors or trustees. Are they likely to end up at the center of family conflict, and if so, will they be able to handle it? Are there family conflicts that might arise from things in your estate plan? Would talking to your loved one’s help head off those conflicts?
Beneficiary Designations
Beneficiary designations, those documents you fill out when you purchase life insurance or start a retirement account, are often forgotten when creating an estate plan. This can cause problems because beneficiary designations actually override any instructions that you place in a will or a trust. Therefore, you should make your estate plan in conjunction with these documents and keep them up to date.
In Case of Incapacity
What if you become temporarily or permanently incapacitated and cannot make medical or financial decisions? You can appoint someone in your family to make decisions on your behalf. There are several different ways to do this, including with powers of attorney, advance health care directives or other types of documents that an attorney can help you prepare.
